Wal-Mart ( WMT ) said it will raise its starting wage to $11 an hour as part of an initial plan to "share in tax savings" with 1 million employees.
[ibd-display-video id=3076727 width=50 float=left autostart=true] The retail giant said the wage hike will cost it $300 million in the coming fiscal year, beyond its already-planned wage increases. Wal-Mart also said it will spend another $400 million in the current year ending Jan. 31 on one-time bonuses ranging from $200 to $1,000 based on length of service.
As the nation's largest private employer, Wal-Mart has a big influence on working-class wages, so its pay hike could result in increases for many other workers in modest-pay industries.
Shares of Wal-Mart fell 1 cent to 99.66 on the stock market today . Wal-Mart has been flirting with a 100.23 flat-base buy point, but the stock's relative strength line has been lagging while the major averages continue to climb.
The Dow Jones industrial average, Nasdaq composite and S&P 500 index all were up about 0.2%-0.3% in the early going after the Nasdaq and S&P 500 suffered their first loss of 2018 on Wednesday.
On Wednesday, Waste Management ( WM ) joined the parade of companies providing bonuses or wage hikes on the heels of tax cuts, saying up to 34,000 employees would get a $2,000 bonus . With Wal-Mart's moves, companies are crediting the tax cuts for providing additional pay to more than 2 million workers.
Among the biggest announcements have been $1,000 bonus awards by American Airlines ( AAL ) (127,000 employees); AT&T ( T ) (200,000); Bank of America ( BAC ) (145,000); and Comcast (CMCSA) (100,000). The generosity of those announcements was undercut somewhat by reports that AT&T and Comcast were in the midst of layoffs.
In addition, utilities are implementing modest cuts to the power bills of millions of customers .
IBD'S TAKE:Wal-Mart is ranked No. 2 by IBD in the Retail-Major Discount Chains industry group, based on earnings, sales, margin and stock performance trends. Visit IBD Stock Checkup to see how other retailers stack up. The Retail-Major Discount Chains group is ranked No. 41 of 197 industry groups based on stock performance.As long as the current " confirmed uptrend " - the equivalent of a green light - stays in place, leading stocks breaking above a buy point are more likely than not to have the wind at their backs. Here's a good place to start looking for stocks that may be poised to move higher.
Wal-Mart also announced additional benefits for full-time hourly associates, including 10 weeks of paid maternity leave and six weeks of paid parental leave, as well as adoption assistance of $5,000.
Wal-Mart's wage hike follows one by Target (TGT), which increased its minimum wage to $11 an hour starting last October. At the same time, Target made a commitment to raise its base wage to $15 an hour by the end of 2020.
In January 2016, Wal-Mart said it would hike its minimum wage for nearly all employees to $10 an hour, but it kept its starting wage at $9 an hour for employees in their first six months.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
